Muted Debut: Kross Shares List Flat at ₹240 on NSE and BSE, Matching IPO Price

Kross Limited made its stock market debut, listing its shares at ₹240 on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). This price matches the upper end of its IPO price band, which was set between ₹228 and ₹240. The initial public offering (IPO) was open for subscription from September 9 to September 11, 2024, and raised ₹500 crore, consisting of a fresh issue and an offer for sale.

Kross IPO Overview

Kross Limited is a prominent manufacturer specializing in trailer axles and suspension assemblies for medium and heavy commercial vehicles (M&HCV) and agricultural equipment. The company has established itself in the Indian market by focusing on quality and innovation. Kross has developed long-term relationships with major original equipment manufacturers (OEMs) such as Ashok Leyland and Tata International DLT.The IPO’s pricing strategy aimed to attract a diverse range of investors, with a lot size of 62 shares. Despite a strong subscription rate, the stock’s debut was considered muted, as it did not see any significant listing gains.

Subscription and Market Response

The Kross IPO was met with a robust response during its subscription period. The overall subscription rate was reported at 16.81 times. Qualified institutional buyers (QIBs) subscribed 23.32 times, while non-institutional investors (NIIs) subscribed 22.24 times. Retail investors showed a healthy interest as well, with their portion being subscribed 10.75 times.

However, the grey market premium (GMP) for Kross shares had been fluctuating, indicating a potential listing gain. Initially, the GMP was around ₹50, suggesting a possible listing price of ₹290, but this enthusiasm did not translate into actual market performance on the listing day.

Financial Performance and Future Prospects

Kross Limited’s financials have shown impressive growth. For the fiscal year ending March 2024, the company reported a 27% increase in revenue, reaching ₹620 crore, while net profit surged by 45% to ₹44.8 crore. These figures reflect a compound annual growth rate (CAGR) of 44.4% in revenue and 91.8% in profit over the past three years.

The funds raised from the IPO are expected to be utilized for debt repayment and future growth initiatives. This strategic move is anticipated to enhance Kross’s earnings potential, positioning the company for long-term success.

Market Expectations and Risks

Despite the strong financial performance, Kross faces certain risks. A significant portion of its revenue relies on a few major clients, which could pose challenges if any of them reduce their orders. Additionally, all of Kross’s manufacturing facilities are located in Jamshedpur, Jharkhand, making the company susceptible to regional disruptions.

Brokerages had mixed views on the IPO. While many suggested a long-term investment due to Kross’s established market position and consistent financial growth, concerns about high valuations and the overall downturn in the auto industry were highlighted as key risks.

Kross IPO Allotment and Listing Process

Investors who applied for the Kross IPO can check their allotment status via the BSE website or the registrar’s portal, KFin Technologies. The allotment process was conducted on a lottery basis, and investors received notifications regarding the shares allotted to them.

The registrar is responsible for ensuring that the shares are credited to successful applicants’ demat accounts. Refunds for unsuccessful bids are also processed promptly, allowing investors to stay informed about their application status.

Disclaimer: The information given in this article is from investment experts and brokerage companies, they do not represent Local Haryana. Before taking any investment related decision, you must consult a certified expert.